A bill for an Act to introduce tax on communication and cable television services scaled first reading at the Senate on Wednesday.
The introduction of the tax, it was learnt, was to replace the 2.2 per cent increase in the Value Added Tax being planned by the Federal Government.
The Bill for an Act to establish the Communication Service Tax was sponsored by a former Senate Leader, Ali Ndume.
Briefing journalists shortly after the first reading of the bill was taken by the Senate, Ndume said the imposition of tax on communication service was a better way of distributing wealth in such a way that would not affect the ordinary people.
He said increasing VAT would have very devastating effects on the economy as it would raise prices of goods and services.
The bill provides the charging of nine per cent on calls and data usage.
The bill reads in part, “There shall be imposed, charged payable and collected a monthly Communication Service Tax to be levied on charges payable by a user of an electronic communication service other than private electronic communication services.
“The tax shall be levied on electronic communication services supplied by service providers.
“For the purpose of this clause, the supply of any form of recharges shall be considered as a charge for usage of electronic communication service.
“The tax shall be levied on such electronic communication services like voice calls, SMS, MMS, data usage – both from telecommunication services providers and internet service – as well as pay per view TV stations.
“The tax shall be paid together with the electronic communication service charge payable to the service provider by the consumer of the service.”
The bill stipulates that the Federal Inland Revenue Service would pay the tax collected together with any interest and penalty into the Federation Account.
According to the bill, all service providers shall file a tax return to account for the tax.
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